Marketing Management

Why it is supremely important to have satisfied customers?

1. Buys more & stays loyal

2. Buys additional products as the company introduces

3. Talks favorably about the company

4. Pays less attention to competing products

5. Costs less to serve then new consumer

The Golden Rule

Rule #1: The customer is always right!

Rule #2: If the customer is wrong, follow rule #1.

HARRY GORDON SELFRIDGE Selfridge & Co Ltd, 1909

What is Marketing???
According to AMA The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

According to CIM
"The management process responsible for identifying, anticipating and satisfying customer requirements profitably.

What is Marketing???
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

What is Marketing???
According to Philip Kotler Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others

Marketing is simply creating and maintaining demand for you product

What is Marketing???

Importance of Marketing
Marketing influences many aspects of peoples daily lives
All goods and services they buy Stores in which they purchase Radio and TV programs they consume are paid for by advertising CV they produce to impress potential employers

Marketing offers exciting career paths Marketing is important to every organisation

Importance of Marketing
Marketing concepts and techniques are also relevant for non-profit companies Marketing plays a major role in economic growth and development by
Stimulating research and new ideas, resulting in new goods and services Providing choice among products which may satisfy customers, resulting in fuller employment, higher incomes and higher standards of living

Scope of Marketing
Goods

Scope of Marketing
Experiences

Scope of Marketing
Events

Scope of Marketing
Persons

Scope of Marketing
Services

Scope of Marketing
Places

Scope of Marketing
Ideas

Scope of Marketing
Information

Scope of Marketing
Organizations

Modern Marketing System

Suppliers

Competitors Environment

Company (Marketer)

Environment

Marketing Intermediaries

End User Market

What is Marketing Management?

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Tasks of MKT Management

Developing marketing strategies Capturing marketing insights Connecting with customers Building strong brands Shaping market offerings Delivering value Communicating value Creating long-term growth

What is Marketing Plan???

A marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tactical level. A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives

Two levels of a Marketing Plan

Strategic
Target marketing decisions Value proposition Analysis of marketing opportunities

Tactical
Product features Promotion Merchandising Pricing Sales channels Service

Internal Marketing?
Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well

Core Marketing Concepts

Core Concepts
Need

A state of felt deprivation of some basic satisfaction

Wants

Are desire for specific satisfiers to fulfill the needs

Demand

Are wants for specific products that are backed by an ability and willingness to buy them

Core Concepts
Market Offering

Some combination of products, services,

information or experiences offered to a market to satisfy a need or want

Core Concepts
Value

The difference between the benefits a customer

derives from an offering and the cost of those benefits A good or service that does not meet a consumers needs results in low customer value, even if the price is very low A higher price may be acceptable if the desired benefits are obtained

Core Concepts
Very Important to remember

Customer are and will always be value

maximizers
An organisation that offers superior customer value is likely to win and keep customers

Core Concepts
Customer Satisfaction

The extent to which a products perceived

performance matches a buyers expectations

Core Concepts
Exchange & Transaction

In how many ways ppl can get what they Want??

Four ways people can obtain what they want 1. Self-production 2. Coercion 3. Begging 4. Exchange
Marketing emerges when people decide to satisfy their needs & wants through exchange

Core Concepts
For exchange to take place

5 conditions must exist

2 parties Something of value for other

Capable of communication
Free to accept or reject the offer

It is appropriate or desirable to deal with the other party

Core Concepts
Markets

Consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want Competition Includes all the actual and potential rival offerings and substitutes that a buyer might consider

Core Concepts
Marketing Channels

The sources/network used by marketers to reach their customers

1.Communication Channels 2.Distribution Channels 3.Service Channels

Core Concepts
Supply Chain

The larger network used in the delivery of product, from raw materials to components to final product to the final buyer Marketing Environment
A larger set of surroundings in which marketing companies operate comprises of micro and macro forces that affect the ability of company to serve its customers

Demand Management

Demand States

Demand States
Negative Demand
A major part of market dislikes the product and may even pay a price to avoid it.

No Demand
Target Consumers may not be interested in or unaware of the product Latent Demand Consumers may share a strong need not currently satisfied by existing products

Demand States
Declining Demand demand gradually going down Irregular Demand demand that varies on a seasonal, daily or even hourly basis Full Demand
organizations face full demand when they are pleases with their volume of business.

Demand States
Overfull Demand Demand higher then the level an organization can handle

Unwholesome Demand When there are organized efforts to curb the consumption of products

4 Types of business orientations towards marketing

Production Concept
Consumer will favor those product that are widely available and low in cost Managers of production oriented organizations concentrate on achieving high production efficiency and wide spread distribution

Product Concept
Consumer will favor those product that offer the most quality, performance, or innovative features

Managers of these organizations focus their energy on making superior products and services and improving them overt time

Selling Concept
Consumer if left alone ordinarily will not buy enough of the organizations products The organization must undertake an aggressive selling and promotion effort

Many organization practice selling concept when they have over capacity
Their aim is to sell whet they make rather then what the market buys

Marketing Concept
Key in achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors

Marketing/Sales Concepts
Starting Point
Factory

Focus
Existing Products

Means
Selling and Promoting

Ends
Profits through Volume

The Selling Concept

Market

Customer Needs

Integrated Marketing

Profits through Satisfaction

The Marketing Concept

Pillars of Marketing Concept

Customer Needs

Profitability

Target

Market

Coordinated Marketing

Needs
Stated Needs
customer wants an inexpensive car

Real Needs
customer wants a car with low operating cost not merely initial low cost

Unstated Needs
The customer expects good service from the dealer

Delight Needs
the customer buys a car and receive full fuel tank for free

Needs
Secret Needs
the customer wants to be seen by the friends as a value oriented

Coordinated Marketing
Means two things
Various marketing functions must be coordinated among themselves

Marketing must be coordinated with the other company departments

Most companies do not embrace the marketing concept until driven to it by circumstances

Sales decline
Slow growth

Changing buying patterns

Increasing competition Increasing marketing expenditures

Regardless of its orientation, marketing managements crucial task is to create profitable relationships with customers

Customer Relationship Marketing

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and Satisfaction

Relationship Building Blocks

Customer Perceived value

Customer Satisfaction

Difference between Total Customer Value and Total Customer Cost

The extent to which a products perceived performance matches a buyer's expectations

Customer Delivered Value

Total Customer Value

Total Customer Cost

Product Value

Monetary Cost

Service Value

Time Cost

Personnel value

Energy Cost

Image value

Psychic Cost

Increasing Customer Value

Raise benefits
Reduce Costs Raise benefits & Reduce Costs Raise benefits by more then the raise in costs Lower benefits by less than the reduction in cost

Customer Development Process

Suspects Prospects Disqualified Prospects First Time Customers Repeat Customers Clients Members Inactive or Ex Customers Advocates Partners

Levels of CR Building

Basic Marketing
Reactive Marketing Accountable Marketing Proactive Marketing Partnership Marketing

High Margin
Many Customers/Distri butors Medium No. of Customers/ Distributors Few Customers/Distri butors

Medium Margin Low Margin Reactive Basic or Reactive

Accountable

Proactive

Accountable

Reactive

Partnership

Proactive

Accountable

Winning Companies
Are able to enhance the value of their customer base by excelling at the following strategies
reducing rate of customer defection

Increasing the longevity of the customer relationship

Enhancing growth potential of each customer through share of wallet , cross selling & up selling profitable

Making low profitable customer more or terminating them

Winning Companies
Focusing disproportionate effort on high value customers

What Customers have today???

A substantial increase in buying power

A greater variety of available products A great amount of information about any thing A greater ease in interacting, placing & receiving orders

An ability to compare notes on products and services

Forces Shaping the New Economy

Digitalization & Connectivity

Customization & Customerization

New Economy

The Internet Explosion

New Intermediaries

Forces Shaping the New Economy

Intranet The network that connect people in the company to each other and to the company network Extranet

A network that connects a company with its suppliers and distributors

Internet

Computer network that allows users all over globe to connect with each other

Forces Shaping the New Economy

Customerization Leaving it to individual customers to design the marketing offering Customization

Taking the initiative to individualize the marketing offering

E-Business
The use of electronic platforms intranets, extranets & internet to conduct a companys business

E-Commerce
Buying and selling processes supported by electronic means, primarily the internet E-Marketing

Companys effort to communicate about, promote and sell products and services ove the internet

Old Vs New Economy

Old Economy
Organize by Products Focus on Profitable Transactions

New Economy
Organize by Segments Focus on Customer Lifetime value

Look at financial scorecard

Focus on shareholders Marketing does marketing Build brands through Adv. Focus on customer acquisition

Look at marketing score card

Focus on Stake holders Everyone does marketing Build brands through Performance Focuson customer retention

No customer satisfaction measurement

Over promise, under deliver

Measure customer satisfaction

Under promise, over deliver

E-Commerce
Benefits to Buyers Convenient Easy & Private Greater product Access & Selection

Comparative information
Interactive and immediate

E-Commerce
Benefits to Sellers Customer relationship building Reduced Cost Incensing speed and efficiency

Flexibility
Global reach

E-Commerce Domains
Targeted to Consumers Initiated By business Initiated By Consumers Targeted To Business

B2C Business to Consumer

C2C Consumer to Consumer

B2B Business to Business

C2B Consumer to Business

Winning Markets through market-oriented strategic planning

Strategic Planning
The process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities

Strategic Planning
Strategic Planning calls for action in 3 key areas 1, Managing companies business as an investment portfolio 2, Assessing each businesses strength - Market Growth Rate -Company position & fit in market 3, Establishing a strategy for achieving its long term objectives

Strategic Planning

Corporate Strategic Planning

1
2

Define corporate mission Establish SBUs Assign resources to SBUs Assess growth opportunities

3
4

Defining Corporate Mission

Who is the customer?
What is our business? What should our business be? What is of value to the customer?

What will our business be?

Establishing SBUs
A business unit that can operate independently from other units
Unique competitors

A single business or collection of related businesses

Leader responsible for planning and profitability

Three Characteristics of an SBU:

Defining SBUs
Customer groups

Customer needs

Technology

Assigning Resources to SBUs

BCG Matrix
High Market Share High MKT Growth Low Market Share

Slow MKT Growth

Assigning Resources to SBUs

GE/McKinsey Matrix
HIGH LOW

Business Position

MED

LOW

MED

HIGH

Industry Attractiveness

SBU Strategy
1, Build

2,
3,

Hold
Harvest

4,

Divest

Assessing Growth Opportunities

New Businesses

Opportunities

Downsizing

Eliminate Businesses

Strategic Planning Gap

Difference between desired sales & growth and projected sales is called SPG

Three options for enhancing sales & minimizing SPG

1, 2, 3, Growth in the current business (intensive growth) Build/acquire related business (integrative growth) Add new unrelated business (diversification)

Strategic Planning Gap

Intensive Growth
Current Products Current Market
Market Penetration Strategy
Market Development Strategy

New Products
Product Development Strategy
Diversification Strategy

New Market

Integrative Growth
Backward Integration
Supplier
Business

Forward Integration
Wholesaler

Horizontal Integration
Competitor

Diversification Growth

Diversification Growth
Three options to diversify 1 Launch product with technical synergies to existing products which appeal to different customers (Concentric Diversification) 2 Launch products different to existing but which appeal to same customers (horizontal diversification) 3 Launch products the are totally unrelated (conglomerate diversification)

Corporate Culture
is the shared experiences, stories, beliefs, and norms that characterize an organization.

Marketing Innovation
3 Groups 1. Youthful & Diverse Ideas 2. Far Away from HQ 3. New to Industry

Identify and encourage new ideas

Scenario Analysis

Business Strategic Planning Process

Internal Environment

Business Mission

Strength / Weaknesses

Opportunity / Threats

GOAL Formulation

Strategy Formulation

Program Formulation

Implementation

External Environment

Feedback & Control

SWOT Analysis
Strength Weaknesses Opportunities Threats Marketing Opportunity is an area of buyer need or potential interests in which a company can perform Profitably Marketing Opportunity Analysis (MOI)

Opportunity Matrix
High Low
2

Attractiveness

High

Low

Success Probability

Threat Matrix
High Low
2

Seriousness

High

Low

Probability of Occurrence

GOAL Formulation SMART Ranked Specific Measurable Consistent Achievable Reliable Realistic Time Bound

Quantified

Strategy Formulation
1 Over all cost leadership lowest possible cost so as to price lower then competition 2 Differentiation Superior performance in a key area valued by customers 3 Focus Focuses on one or more narrow segments

Strategy Formulation
Strategic Alliances Product or Service alliances Promotional Alliances Logistics Alliances Pricing Collaboration

Strategic Alliances

The Marketing Process

1. Analyze Marketing Opportunities

5. Organizing, implementing & controlling the marketing effort

2. Research & select target markets

4. Planning Marketing Programs

3. Designing Marketing Strategy

Gathering Information and Measuring Market Demand

Collecting Information
Customers

Competitors

External Factors

MIS

Marketing Information Systems, consist of people, equipment & procedures to gather, sort, analyze, evaluate and distribute needed, timely, and accurate information to the marketing decision makers
Internal Records Marketing Research

Insight
Marketing Intelligence

Internal Records
Order-to-Payment Cycle
Databases / Data Mining

Sales Information Systems

Marketing Intelligence System

Marketing Intelligence systems include all procedures and sources used by managers to get every day information about development in the News and Trade Publications market

Monitor social media sites

Meet with customers, suppliers, distributors, and other managers

Improving MIS
Sales Force
Establish industry network

External Experts

Customer Advisory Panel

Competitors products/open house seminars/talking to employees

Conducting Marketing Research

Marketing Research
Is a systematic design, collection, analysis, and reporting of data and findings relevant to a particular or specific marketing situation facing

the company
Marketing research firms fall into 3 categories

1. Syndicated service research firms

2. Custom marketing research firms

3. Specialty-line marketing research firms

Marketing Research Process

Define the problem and research objective

Develop the research Plan

Collect the Information

Analyze the Information

Present the Findings

Make the Decision

Research Objectives
Exploratory Research
Gathers preliminary information that will help define the problem and suggest hypotheses

Descriptive Research

Describes things as market potential for a product or the demographics and consumers attitudes Test hypotheses about causeand-effect relationships

Causal Research

Step 2 Research Plan

Research plan development follows these steps:
Determining Specific Information Needs

Gathering Secondary information

Planning Primary Data Collection

Information Sources
Secondary
Information that already exist somewhere, having been collected earlier or for other purposes

Primary

Data

In formation collected for the specific purpose at hand

Both Must Be: Relevant Accurate Current Impartial

Research Approach
Observational Research
Gathering data by observing people, actions and situations (Exploratory)

Survey Research
Asking individuals about attitudes, preferences or buying behaviors (Descriptive)

Experimental Research
Using groups of people to determine cause-and-effect relationships (Causal)

Sampling Plan
Sample:- A segment of population selected for marketing research to represent the total population Who??? How Many??? How???

Contact Method
Contact Method
Mail Questionnaire Online Telephone Interviewing

Personal interviewing Group Interviewing

Research Instruments
Research Instruments

Questionnaire
What questions to ask? Form of each question? Closed-end Open-end Wording? Ordering?

Mechanical Devices
People Meters Supermarket Scanners

Marketing Research Process

Implementing the Research Plan

Collecting the Data

Processing the Data

Research Plan

Analyzing the Data

115

Marketing Research Process

Interpreting and Reporting Findings Researcher Should Present Important Findings that are Useful in the Major Decisions Faced by Management.
Step 1. Interpret the Findings

Step 2. Draw Conclusions

Step 3. Report to Management

116

Market
Market A set of all actual & potential buyers of a market offer Potential Market Is the set of consumers who profess a sufficient level of interest in the offer Available Market Is the set of consumers who have interest, income, access to the particular offer

Market
Target Market Part of available market the company decides to serve Penetrated Market Is the set of consumers who are buying the companys product

Market Demand
Total volume of a product that would be bought by a defined customer group in a defined geographic area in a defined time period under a defined marketing environment given a defined level of industry market expenditure

Market Forecast

Only one level of industry marketing expenditure would occur, the market demand corresponding to this level is called the market forecast

Market Potential
The limit approached by market demand as industry marketing expenditure approach infinity

Company Demand
Companys estimated share of market demand at alternative levels of company marketing effort in a given time period

Company Sales Forecast

Expected level of company sales given a certain marketing effort or program

Total Market Potential

The total volume of sales that will be available to all firms in the industry over a period of time, given a certain level of industry expenditure Q = npq n= no. of buyers q=quantity purchased by avg. buyer p=price of an avg. unit

Measuring Future Demand

Sales Force Opinions

Buyers Intentions

Forecasting

Past Sales Analysis

Expert Opinions

Measuring Marketing Efficiency

Marketing metrics
Quantify

Compare

Marketing Performance

Interpret

External
Awareness Market share Relative price Number of complaints Consumer satisfaction Total number of customers Perceived quality/esteem Loyalty/retention Relative perceived quality

Measuring Dashboard

Analyzing Consumer Markets

Consumer Market All individuals and households who buy or acquire goods and services for personal consumption Consumer Buyer Behavior

Buying behavior of final consumers

The central question for marketers is: How do consumers respond to various marketing efforts the company might use?

Factors Influencing Buyer Behavior

Cultural
Culture Subculture Social class

Social
Reference groups Family Roles and status Age and life-cycle Occupation Economic situation Lifestyle Personality and selfconcept

Personal

Psychological
Motivation Perception Learning Beliefs and attitudes

Buyer

Factors Influencing Buying Behavior Cultural factors

Culture
Basic values, perceptions, wants and behaviors learned from family and other institutions

Sub Culture
people with shared values system based on common life experiences and situations

Social Class
Relatively permanent and ordered divisions in a society whose members share similar values, interest and behaviors

Social Factors
Reference Groups

Family

Role and Status

Personal Factors
Occupation
Economic situation

Personality

Age Values

Life Cycle Stage

Factors Influencing Buying Behavior

Psychological Factors Motivation Perception Learning Beliefs & Attitude

Buying Roles
1, Initiator 2, Influencer 3, Decider 4, Buyer 5, User

Four Types of Buying Behavior High

Brand differences
Significant

Low
Variety-seeking buying Behavior Habitual Buying Behavior

Complex Buying Behavior Dissonance reducing Buying behavior

Few

Involvement

Buying Decision Process

How can marketers learn about BDP stages? 1.How they would act (introspective method) 2.Interview recent purchaser (retrospective method) 3.Ask consumers who plan to buy (prospective method) 4.Ask consumers to describe ideal way to buy (prescriptive method)

Buyer Decision Process

Purchase Decision
Evaluation of Alternatives Information Search Need Recognition Postpurchase Behavior

137

Need Recognition
Im Hungry
State Where the Buyers Needs are Fulfilled and the Buyer is Satisfied. Needs Arising From: Internal Stimuli

Hunger
External Stimuli-

Friends

Information Search
Two Levels of search arousal 1.Heightened Attention 2.Active Information

The Buyer Decision Process Step 2. Information Search

Personal Sources
Commercial Sources Public Sources Experiential Sources
Family, friends, neighbors Most effective source of information Advertising, salespeople Receives most information from these sources Mass Media Consumer-rating groups

Handling the product Examining the product Using the product

The Buyer Decision Process

Consumer May Use Careful Calculations & Logical Thinking Consumers May Buy on Impulse and Rely on Intuition Consumers May Make Buying Decisions on Their Own. Consumers May Make Buying Decisions Only After Consulting Others.

Step 3. Evaluation of Alternatives

Marketers Must Study Buyers to Find Out How They Evaluate Brand Alternatives

The Buyer Decision Process

Step 4. Purchase Decision
Purchase Intention
Desire to buy the most preferred brand

Attitudes of Others

Unexpected Situational Factors

Purchase Decision

Buying Decision
In executing a purchase decision a consumer may take up to 5 sub decisions 1.Brand Decision 2.Vendor Decision 3.Quantity Decision 4.Timing Decision 5.Payment-Method Decision

Postpurchase Satisfaction
Satisfied Dissatisfied

Delighted

Loyal Stay or Go

Defect

Post purchase Actions

Stages in the Adoption Process

Awareness: Consumer is aware of product, but lacks information. Interest: Consumer seeks Information about new product. Evaluation: Consumer considers trying new product. Trial: Consumer tries new product on a small scale. Adoption: Consumer decides to make regular use of product.

Adoptors Categories
Percentage of Adopters Early Majority Late Majority

Innovators

Early Adopters
13.5%

34%

34% 16%

Laggards

2.5%

Time of Adoption

Early

Late

Identifying Market Segments and Selecting Target Markets

Evolution of marketing strategy

3 stages 1.Mass Marketing 2.Product-Variety Marketing 3.Target Marketing

Target Marketing:- The process of

evaluating market segments attractiveness and selecting one or more segments to enter

Strategic Target Marketing

1. Identify and profile distinct groups of buyers (market segmentation). 2. Select one or more market segments to enter (market targeting). 3. For each, establish and communicate benefits of offering (market positioning).

Why Target Market???

1.Helps identify marketing opportunities better 2.The seller can develop right offer for the right market 3.The price, distribution & adv. Can be adjusted to reach the consumers effectively 4.They can focus on buyers whom they have the greatest chances to satisfying

Market Segmentation 1. Identify Segmentation Variable & segment the market 2. Develop profiles of resulting segments

Market Targeting
3. Evaluate the attractiveness of each segment

Market Positioning

4. Select the target segment

5. Identify possible positioning concepts

6. Select, develop & communicate the chosen positioning

Levels of MKT Segmentation

1.Mass Marketing 2.Segment Marketing 3.Niche Marketing 4.Local Marketing 5.Individual Customer Marketing

Patterns of MKT Segmentation

1. Homogeneous preference 2. Diffused Preference 3. Clustered Preference

Major Segmentation Methods

Geographic

Demographic

Psychographic

Behavioral

Enthusiastic

Positive

Indifferent

Negative

Hostile

Psychographic Segmentation

Behavioral Segmentation
Usage occasions User status

Usage rate
Buyer-readiness Loyalty status

User and Usage

Effective Segmentation
To be useful segments must be; 1.Measurable 2.Substantial 3.Accessible 4.Differentiable 5.Actionable

Evaluating Segments
Two major factors 1.Company Objectives & Resources 2.Overall attractiveness of the segment Over all attractiveness
1, Size & Growth

Structural Attractiveness
New Entrants

Substitute Products

Buyer Power

Intense Rivalry

Segment

Supplier Power

Barriers & Profitability

Low Entry Barriers Low High
Low Stable returns
High, Stable returns

High
Low Risky returns
High risky returns

Exit Barriers

Target MKT Selection

M1 P1 M2 M3

P2 P3

Single Segment concentration

Target MKT Selection

M1 P1 M2 M3

P2 P3

Selective Specialization

Target MKT Selection

M1 P1 M2 M3

P2 P3

Product Specialization

Target MKT Selection

M1 P1 M2 M3

P2 P3

Market Specialization

Target MKT Selection

M1 P1 M2 M3

P2 P3

Full Market Coverage

Positioning & differentiating

the market offering through Product Life Cycle

There are 4 broad ways to think about differentiating a company offer The firm can create value by offering something that is 1. Better 2. Newer 3. Faster 4. Cheaper

Differentiation
the act of designing a set of meaningful differences to distinguish the companys offer from competitors offers Product Differentiation Services Differentiation Personnel Differentiation

Image Differentiation

Product Differentiation
At one extreme are products with little possibility of differentiation

Chicken, steel, aspirin

On the other spacterm are product with limitless possibilities of differentiation Automobile, furniture etc

The main product differentiators are

Features, Performance, Conformance, Durability, Reliability, Style, Design

Features
Are characteristics that supplement the products basic functioning

Performance
Refers to the levels at which the products primary characteristics operate

Conformance
The degree to which a products design and operating characteristics come close to the target standard

Durability
Is a measure of the products expected operating life

Reliability
Is a measure of the probability that a product will not malfunction or fail within a specified time period

Repair-ability
Measure of the ease of fixing a product that malfunctions or fail

Style
Describes how well the product looks and feels to the user

Design
All of the above qualities are design parameters

Service Differentiation
When product can not be easily differentiated, the key to competitive success often lies in services augmentation & quality

Delivery
Refers to how well the product or service is delivered to the customer

Installation
Refers to the work done to make a product operational in its planned location

Customer Training
Refers to training the customers employees to use the vendors equipment properly & efficiently

Consulting Service
Refers to data, information system, advising service that the seller offers free or for a price to buyer

Repair
Describes the quality of repair service available to buyers of the companys product

Personnel Differentiation
Companies can gain a string competitive advantage through hiring and training better people than their competitors

Image differentiation
Buyers respond differently to company & brand images. Hence identity & image needs to be differentiated Identity comprises the ways that a company aims to identify or position itself or its products

Image is the way the public perceives the company or

its products

Identity can be built by; Symbols Slogans Written and audio/visual Media Special attributes Events & Sponsorships

Differences are Stronger if

1. Important-delivers a highly valued benefit to a sufficient no. of buyers 2. Distinctive 3. Superior 4. Preemptive-the difference cannot be easily copied 5. Affordable 6. Profitable

Positioning
The act of designing a company's offer and image so that it occupies a distinct and valued place in the target consumers mind

According to Rise & Trout

Well known brands hold a distinctive positions in the mind of consumers, and it will be hard for competitors to claim these positions

A competitor has 3 alternative 1, Strengthen its current position in the mind of consumers 2, To grab a position currently un occupied position 3, de-position or re-position the competition in the consumers mind

How Many Ideas to Promote???

Many marketers advocate promoting only one idea, a company should develop a USP for every brand and stick to it Not every marketer agrees to single benefit positioning, Double benefit positioning or even triple benefit positioning can also be successful at times However as companies increase the no of claims they make about their brands they risk disbelief and loss of clear positioning, there are four major positioning errors

Under-positioning
Buyers have a vague idea of the brand , they dont really sense anything special about it

Over-positioning
Buyers may have too narrow an image of the brand

Confused Positioning
Buyers may have a confused image of the brand because of company making too many claims or repositioning frequently

Doubtful-positioning
Buyers may find it doubtful to believe the brand claims in view of the product features

Positioning Strategies
There are at least 7 possible positioning strategies

Attribute positioning-the company positions itself on

an attribute

Benefit positioning-the product I positioned as leader

in certain attribute

Use/Application positioning User positioning

Competitor positioning
Product category positioning

Quality /Price positioning

Product Lifecycle
To say that products have a life cycle is to assert 4 things

1. Products have a limited life

2. Product sales passes through distinct stages

3. Profits rise & fall at different stages

4. Product require different marketing, financial, manufacturing, purchasing & human resources strategies in each life-cycle stage

PLC Stages
1. Introduction-a period of slow sales growth as the
product is introduced in the market, profits are non existent because of heavy marketing expenditures

2. Growth-a stage of rapid market acceptance and

substantial profit improvement

3. Maturity-a period of slowdown in sales growth

because the product has achieved acceptance by most potential buyers

4. Decline-the period when sales show a downward

drift and profits erode

Three specific categories of Life cycle

Style: is a basic mode of expression appearing in a filed

of human endeavor, a style can last for generations

Fashion: is a current accepted or popular style in a

given field, fashion pass through four stages, distinctiveness, emulation, mass-fashion, decline

Fad-are the fashion that comes quickly into publics

view, are adopted with great zeal and decline very fast

MKTNG Strategies- Introduction

Promotion

High High
Price Rapid Skimming Strategy Rapid Penetration Strategy

low
Slow Skimming Strategy

low

Slow Penetration Strategy

MKTNG Strategies- Growth

1. It improves product quality, adds new product features, and improve styling 2. It introduces new models & flanker products 3. It enters new market segments 4. It increases its distribution coverage & enters new distribution channels 5. It shifts from product awareness advertising to product preference advertising 6. It lowers prices to attract the next layer of pricesensitive buyers

MKTNG Strategies- Maturity

Three strategies, Market, Product & Marketing Mix Modification

Market Modification
Volume = no. of users x usage rate No. of brand users can be increased in 3 ways 1. Convert Non Users 2. Enter New Market Segments 3. Win Competition Customers

MKTNG Strategies- Maturity

Usage can be increased in 3 ways 1. More frequent use 2. More usage per occasion 3. New & more varied Uses

Product Modification
1. Features 2. Quality 3. Style

MKTNG Strategies- Decline

1. Identify weak products or services

2. Determine Marketing Strategies

-Increase Investment

-Maintaining Investment
-Decreasing Investment -Harvesting -Divesting

Pricing Consideration & Strategies

Price
The amount of money charges for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service Two types of Pricing 1.Fixed Pricing 2.Dynamic Pricing

Price
Only element of MIX that represents revenue One of the most flexible

Factors Affecting Pricing

Two types of factors affect pricing decisions 1.Internal factors
-Marketing Objectives -Marketing Mix Strategy -Costs -Organizational Considerations

1.External factors
-The market and demand -Competitors Costs, Prices and Offers

General Pricing Approaches

Three types of general approaches 1.Cost based pricing 2.Buyer based approach 3.Competitor based approach

Cost Based Pricing

Cost-Plus Pricing
Adding a standard markup to the cost of the product

1. Break Even Analysis

The price at which the firm will make no profits or no loss

2. Target Profit Pricing

The price at which a firm will make the desired profit

Buyer Based Pricing

Setting price based on buyers perception of the value rather then on the sellers cost 1.Value Pricing Offering just the right combination of quality and good services at a fair price

Competitor Based Pricing

Setting price based on the prices competitors charge for similar products

New Product Pricing Strategy

Two broad strategies available to companies when they introduce a product in the market

1.Market skimming Pricing

Setting a high price to skim maximum revenues layer by layer from the segments willing to pay the high price

The company makes fewer but profitable sales

New Product Pricing Strategy

Market Penetration Pricing
Setting a low price in order to attract a large no. of buyers and a large market share

The company makes large but less profitable sales

Product Mix Pricing Strategy

When product is a part of a large product mix the pricing strategies have to be changed, 5 options exist

1.Product Line Pricing

Setting the price steps b/w various products in a product line based on cost differences, customer evaluations of different features and competitors prices

Product Mix Pricing Strategy

Optional Product Pricing
The pricing of optional or accessory products along with a main product

Captive Product Pricing

Setting the price of products that must be used along with a main product, such as blades for a razor and film for a camera

Product Mix Pricing Strategy

By Product Pricing setting a price for by product in order to make the main products price more competitive Product Bundle Pricing
Combining several products and offering the

bundle at a reduced price

Price Adjustment Strategies

Six types of strategies

1.Discount
A straight reduction in price on purchase during a stated period of time 2. Allowance Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturers product in some way

Price Adjustment Strategies

3.Segment Pricing
Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs 4. Psychological Pricing A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product

Price Adjustment Strategies

5. Promotional Pricing Temporary pricing to boost sales

Reason For Price Changes

1.Price Cuts Excess capacity Falling market share Dominate market through lower 1.Price Increase Cost inflation Over demand